UK average house prices have risen to a new all-time high of £293,333 – some £492 above the previous record in June 2022.
The figure comes from mortgage lender Halifax and suggests the property market is moving from recovery to growth, according to industry experts – and today’s 0.25% Bank of England interest rate cut is expected to bring a further boost to the property market.
The availability of cheaper mortgages in recent months has boosted the confidence of buyers. At the same time a rush to buy is expected in the coming weeks as buyers seek to avoid rises in stamp duty that will come into effect from April 1.
Head of mortgages at Halifax, Amanda Bryden, said: “Despite the affordability challenge, market activity has been improving.
“The number of new mortgages agreed recently reached its highest level in two years. This aligns with average mortgage rates dropping steadily since spring coupled with continued positive income growth.”
Halifax said the average UK price is up by 0.2 percent in October on the previous month and by 3.9 percent on this time last year.
The Bank of England cut interest rates for a second time this year at noon on Thursday, providing a further boost to affordability.
However, market expectations of another cut before Christmas have faded following the Budget which is predicted to push inflation and interest rates slightly higher than previously predicted.
Amanda Bryden said: “While we expect house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next. New policies like higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers might also affect demand.”
Matt Swannell, Chief Economic Advisor to the EY ITEM Club, said: “The recent momentum in the Halifax house price data has been matched by the recent data on housing market activity, which saw a pickup over the summer and into September as the prospect and then the delivery of the Bank of England’s first cut in interest rates boosted mortgage demand.
“The EY ITEM Club does not think that the recent Budget has taken interest rate cuts off the table.”
Craig Fish, Director at Lodestone Mortgages & Protection, said: “The increased demand that we have seen during the last few months due to lower mortgage rates has further bolstered house prices.
“Once the fallout of the Budget settles, this is likely to continue. It would appear that this government are going to fall a long way short of solving the deep housing problem on our small island and so house prices, as always, will continue their ascent to ever new highs.”
Justin Moy, Managing Director at EHF Mortgages, told Newspage: “Property values are at the very heart of the UK population’s confidence, so continued increases in average prices will only help lift the subdued economic fog.
“Whilst mortgage rates have wobbled since the Budget announcement, today’s likely base rate cut will only add to that positivity for homeowners, as the market braces itself for a stamp duty stampede.”
Ranald Mitchell, Director at Charwin Mortgages, said the Halifax figures confirm property market resilience.
“Despite recent economic challenges, annual growth remains strong, particularly in Northern Ireland. With forecasts of up to 25% growth over the next five years, the outlook is optimistic, underscoring property’s enduring strength in uncertain times,” he said.
